Capital Markets: Observations & Insights

A Slow Fed Keeps Away the Red? Fundamentals

• On average, the U.S. has not entered a recession until about three years after material Fed tightening • But the Fed is tightening much more slowly than it has historically

Fed Has Been Tightening Very Slowly (Basis Points per Month)

25

20

18

17

16

15

5

'83-84 (16 months)

'86-89 (27 months)

'94-95 (12 months)

'99-00 (11 months)

'04-06 (24 months)

Average (18 months)

'15-Current (22 months)

Source: FactSet and J.P. Morgan as of 9/30/2017.

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